Definition
Where an analytical procedure looks at patterns, a test of details looks at items. The auditor selects a sample, specific items or the whole population, then applies procedures such as inspection, confirmation, recalculation or reperformance to each item and records the result. Together with substantive analytical procedures, it makes up the substantive procedures required by AU-C 330.
Why it matters in an audit or review
Tests of details give item-level evidence that can quantify a misstatement, which analytics usually cannot. They are the default for higher-risk assertions and for balances that are made up of discrete, identifiable items, such as receivables, debt and fixed assets. How items are selected affects whether results can be projected to the population.
Example
For a $6 million accounts payable balance (illustrative), the auditor tests details by confirming three vendors with the largest balances and vouching 25 payments after year end to invoices to look for unrecorded items. Each test targets a different assertion: existence in the first and completeness in the second.
Common mistakes
- Using one test for several assertions without stating which one it covers.
- Selecting items without a defined population and then projecting.
FAQ
Is a test of details the same as substantive testing?
It is one of two parts. The other is substantive analytical procedures.
Sources
- AICPA, AU-C Section 330, Performing Audit Procedures in Response to Assessed Risks
- AICPA, AU-C Section 500, Audit Evidence
- AICPA, AU-C Section 530, Audit Sampling
Definitions paraphrase AICPA and FASB guidance; read the standard itself before relying on a requirement. Example figures are illustrative. This page is guidance, not professional advice. Report an error